FedEx Class Action Defense Case-Moody v. Federal Express: Illinois Appellate Court Affirms Judgment In Favor Of Defense Against Class Action Alleging Breach Of Contract Because Class Action Complaint Sought Remedy Outside Scope Of Contract

Defense Attorneys Successfully Defeat Class Action Alleging State Law Breach of Contract Claim Because Contract Set Forth Exclusive Remedies in Event of Breach and Class Action Complaint Sought a Different Remedy

Plaintiff filed a one-count nationwide class action in state court against FedEx alleging that it breached the terms of its shipping contract with customers because it charged higher rates for express delivery service but failed to deliver the packages on time. Moody v. Federal Express Corp., ___ N.E.2d ___, 2006 WL 3012854 (Ill.App. October 19, 2006) [Slip Opn., at 2]. Plaintiff paid $41.31 to send a package on January 22, 2002 by “FedEx Priority Overnight, Next Business Morning” expecting the package to be delivered by 8:00 a.m. the following morning; instead, the package was delivered two days later at 9:00 a.m. _Id._ Defense attorneys moved for summary judgment on the grounds that the relief sought in the class action violated the federal Airline Deregulation Act, 49 U.S.C. § 41713(b)(1), “because it sought a remedy outside the four corners of the contract.” _Id._ The trial court agreed that the claims were preempted and dismissed the class action; the Illinois Appellate Court affirmed on straight contract grounds without reaching the federal preemption issue.

Class Action Court Decisions Uncategorized

Hood v. Santa Barbara Bank-Class Action Defense Cases: Trial Court Improperly Granted Defense Motion To Dismiss Class Action Alleging CLRA, UCL And FDCPA Violations Because Class Action Claims Were Not Preempted By Federal Law California Court Holds

California Appellate Court Split Opinion Rejects Defense Federal Preemption Arguments and Reverses Order Dismissing Class Action

Plaintiffs filed a putative class action in California state court against a bank alleging conversion, and violations of California’s Consumers Legal Remedies Act (CLRA), Unfair Competition Law (UCL), Fair Debt Collection Practices Act (FDCPA) based on the bank’s “wrongful” release of tax refund monies to a third party creditor bank. Hood v. Santa Barbara Bank & Trust, 143 Cal.App.4th 526, 49 Cal.Rptr.3d 369, 373 (Cal.App. 2006). Defense attorneys cross-complained against several other banks, and the banks filed motions for judgment on the pleadings on the ground of federal preemption. Id., at 375. The trial court granted the motions, concluding that the “visitorial powers” regulation, the deposit-taking regulation and the non-real estate lending regulation adopted by the Office of the Comptroller of the Currency (OCC) expressly preempted plaintiffs’ class action claims. Id., at 375-76. By a 2-1 vote, the California Court of Appeal reversed.

Class Action Court Decisions Uncategorized

Jackson v. Midland Credit-Class Action Defense Cases: Illinois Federal Court Grants Defense Motion For Summary Judgment Holding Debt Collection Letter Did Not Violate Federal Fair Debt Collection Practices Act (FDCPA)

Federal Court Rejects Class Action Claim that Offer to Settle Debt for 50% of Current Balance Due Violates Fair Debt Collection Practices Act (FDCPA)

Plaintiffs filed a consolidated class action complaint against Midland Credit Management, a debt collector that purchases debts from third-party creditors, alleging violations of the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 et seq. Midland sent letters attempting to collect outstanding debts; the class action complaint alleged that the letters violated the FDCPA because they contain false and misleading information. Defense attorneys filed a motion for summary, and plaintiffs followed with a cross-motion for summary judgment. The federal district court agreed with defense attorneys that the collection letters did not violate the FDCPA and granted summary judgment in favor of Midland and against the class action plaintiffs. Jackson v. Midland Credit Management, Inc., 445 F.Supp.2d 1015, 1017 (N.D. Ill. 2006).

Preliminarily, the district court noted that the Seventh Circuit “evaluates FDCPA claims through the eyes of an ‘unsophisticated debtor’” – it does not employ the “least sophisticated debtor” test adopted by some sister circuits. Jackson, at 1018-19. The court explained at page 1018 that, under this test,

“The unsophisticated debtor is regarded as ‘uninformed, naive, or trusting,’ but nonetheless is considered to have a ‘rudimentary knowledge about the financial world and is capable of making basic logical deductions and inferences.’” (Citations omitted.)

Because the court’s analysis requires an understanding of the specific language used in Midland’s letters, we provide the quoted language, including the emphasis in the original letters, as set forth by the district court at page 1017:

Class Action Court Decisions FDCPA Class Actions Uncategorized

Tyson Class Action Defense Case-Trollinger v. Tyson: Tennessee Federal Court Grants Motion To Certify Class Action Alleging Violations Of Federal Racketeer Influence and Corrupt Organizations Act (RICO)

Federal Court Rejects Defense Arguments Against Class Certification of RICO Class Action Complaint Finding that Generalized Evidence Exists to Prove or Disprove the Class Claims and that Methodologies Exist to Calculate Damages

Plaintiffs filed a class action complaint in Tennessee federal court against poultry company Tyson Foods for violations of the federal Racketeer Influence and Corrupt Organizations Act (RICO) predicated on Tyson’s alleged harboring and hiring of illegal aliens in violation of federal law. Trollinger v. Tyson Foods, Inc., ___ F.Supp.2d ___, 2006 WL 2924938 (E.D. Tenn. October 10, 2006) [Slip Opn., at 2]. The complaint alleged that Tyson knowingly employed a substantial number of illegal immigrants and that in so doing “saved . . . large sums of money by driving down wages at the chicken processing plants below what wages would be if the [program] were not in existence.” _Id._, at 3. Following substantial litigation, including motions for summary judgment and judgment on the pleadings, plaintiffs filed a motion for class certification under Rule 23(a) and Rule 23(b)(3), _id._, at 6. The district court granted the motion.

While the district court discussed the requirements for a class action set forth in Rule 23(a), Tyson, at 6-14, the court noted, “It is not at all clear Tyson contests these prerequisites,” id., at 8. Moreover, defense attorneys did not challenge each of the four separate elements considered under Rule 23(b)(3); rather, “Defendants’ only challenges to Plaintiffs’ motion are in respect to Rule 23(b)’s requirements of manageability and predominance.” Id. Thus, while the federal court discussed each of the elements of Rule 23(b)(3), id., at 14-20, it observed that defense attorneys did not address whether class members will have a strong interest in controlling their claims, id., at 15, whether other litigation exists by or against class members, id., or the desirability of concentrating the litigation “in this forum,” id., at 15-16.

Certification of Class Actions Class Action Court Decisions Uncategorized

Baez v. Wagner & Hunt-Class Action Defense Cases: In Class Action Against Debt Collector Florida Federal Court Holds That Law Firm’s Collection Letter Violated Fair Debt Collection Practices Act (FDCPA)

In Case of First Impression Florida District Court Holds that Collection Letter Sent by Law Firm Violated Federal Fair Debt Collection Practices Act (FDCPA) Because it Told Debtor that Validity of Debt could be Disputed Only in Writing

Plaintiff opened an American Express Centurion credit card account. American Express retained a law firm to collect amounts owed on the account. The law firm sent a “Dunning letter” that stated, in pertinent part, that the debtor had to “notify this office in writing within thirty days after receiving this notice that you dispute the validity of the debt.” Baez v. Wagner & Hunt, P.A., 442 F.Supp.2d 1273, 1274 (S.D. Fla. 2006) (italics added by court). Plaintiff filed a class action against the law firm alleging that the collection letter violated Section 1692g of the federal Fair Debt Collection Practices Act (FDCPA) by requiring that the validity of the debt be disputed in writing, and defense attorneys moved to dismiss the complaint. Id., at 1274-75. The basis of the lawsuit is that Section 1692g(a)(3) requires that a debt collection letter notify the debtor that the debt will be assumed valid unless the debtor disputes the validity of the debt within 30 days. Sections 1692g(a)(4) and (a)(5), however, reference written notifications from the debtor disputing the debt. Defendant argued that its Dunning letter simply “provided [plaintiff] with additional guidance for disputing the debt and avoided confusion by reconciling the notification requirement in subsection (a)(3) with the writing requirement contained in subsections (a)(4) and (a)(5).” Baez, at 1275-76. The district court disagreed.

Class Action Court Decisions FDCPA Class Actions Uncategorized

Hartford Class Action Defense Cases-Hartford v. Beaver: Florida Law Requires Insurer Defend Against Claims Of Putative Class Members Even Before Class Action Is Certified Eleventh Circuit Holds

Circuit Court Reverses Judgment for Insurer and Holds that Florida Law Requires Insurers to Defend Against Class Action Lawsuits Before Certification Even if the Only Potentially Covered Claims Involve Members of the Putative Class

Two individuals filed a putative class action against defendants, operators of nursing home facilities, alleging breach of fiduciary duties owed nursing home residents “to provide necessary care, services, and supplies required for their health and well-being.” Hartford Acc. & Indemn. Co. v. Beaver, 446 F.3d 1289, 2006 WL 2933939, *1 (11th Cir. 2006). Plaintiff Estate of Ayres lived in a nursing home from 1986 until his death in 1995; plaintiff Garrison resided in the same nursing home from 1993 until 1997. Hartford defended the class action under a reservation of rights based on a general liability policy that covered the time period from 1987-1992. Id. Hartford then filed suit against defendants seeking a declaration that it owed no duty to defend, and sought summary judgment on its complaint. While the motion was pending, Ayres’ estate settled with defendants and withdrew as a party-plaintiff, leaving Garrison as the sole class representative in the class action. Id. The federal district court granted Hartford’s motion because Garrison’s claim was outside the policy period. While the claims of putative class members fell within the Hartford 1987-1992 insurance policy period, the court concluded that Hartford did not owe a duty to defend against those class action claims “until such time as that class is certified pursuant to Florida Rule of Civil Procedure 1.220.” Id., at *2. The district court explained, “a class must be certified before a claim may be maintained on its behalf” and that prior to certification “there is no class action claim to defend against.” Id. Defense attorneys appealed and the Eleventh Circuit reversed.

Class Action Court Decisions Uncategorized

Bell v. Acxiom-Class Action Defense Cases: Federal Court Grants Defense Motion To Dismiss Class Action Based On “Increased Risk” Of Identity Theft And Receiving Junk Mail Because Plaintiff Lacked Standing

Arkansas Federal Court Agrees with Defense that Plaintiff Failed to Establish Injury-in-Fact and Therefore Lacked Standing to Prosecute the Putative Class Action

Plaintiff filed a putative class action in federal court against Acxiom after a computer hacker compromised the files that the company maintained on its corporate clients, alleging that “Acxiom’s lax security jeopardized her privacy and left her at a risk of receiving junk mail and of becoming a victim of identity theft.” Bell v. Acxiom Corp., ___ F.Supp.2d ___, 2006 WL 2850042 (E.D. Ark. October 3, 2006). Defense attorneys moved to dismiss the class action complaint on the ground that plaintiff lacked standing to prosecute the action. The district court agreed and granted the motion to dismiss.

“Acxiom is a data bank that stores marketing information about its clients’ customers. Acxiom takes this information and ‘match[es] names with lifestyles and demographic information from other sources . . . [to] give . . . [its] client a clear picture of the people buying its products and services.’” Slip Opn., at 1. A computer hacker exploited a weakness in the company’s computer system, downloaded data and sold it to a marketing company who used the names and addresses for direct mail advertising. Plaintiff’s class action alleged that she and others were “at a higher risk of receiving junk mail and of being an identity theft victim” because “Acxiom failed to protect its clients’ data.” Id., at 2. Defense attorneys argued that plaintiff lacked standing because she had not established injury in fact; the court agreed.

Class Action Court Decisions Uncategorized

Alvarez v. May Department Stores-Class Action Defense Cases: California Court Holds That Demurrer To Class Action Allegations Is Proper And Defense Theory Of Collateral Estoppel Properly Applied In Sustaining Demurrer To Overtime Class Action Claims

California Trial Court Properly Applied Collateral Estoppel Principles in Ruling on Demurrer to Class Action Allegations Because Denial of Class Certification in Separate Lawsuit Binds Absent Putative Members of Class

Plaintiffs’ lawyer filed three class action complaints against May Department Stores in various California superior courts that alleged, in part, class action claims for failure to pay overtime to area sales managers: the 1997 Gorman case filed in Los Angeles; the 1999 Duran case filed in San Bernardino; and the 2003 Alvarez case filed in Los Angeles. Alvarez v. May Dept. Stores Co., ___ Cal.App.4th ___, 49 Cal.Rptr.3d 892, 2006 WL 2874907 (Cal.App. October 11, 2006) [Slip Opn., at 3-4.]. In the _Alvarez_ lawsuit, defense attorneys demurred to the class action allegations on the ground of collateral estoppel; the trial court agreed that the doctrine applied and sustained the demurrer to the class action claims without leave to amend. Plaintiffs argued on appeal “that the doctrine of collateral estoppel is inapplicable to an order denying class certification in another lawsuit brought by other plaintiffs because absent putative class members are not bound prior to the certification of a class”; the appellate court rejected this argument and affirmed. _Id._, at 2.

The appellate court briefly summarized the history of the Gorman and Duran litigation, explaining that the trial court denied class action status in Gorman because “plaintiffs had failed to demonstrate a community of interest or an ascertainable class and that the proposed class representatives were unsuitable because they had unsatisfactory employment histories,” Alvarez, at 3, and that trial court order denying class action status in Duran was affirmed on appeal because the interests of the class members were dissimilar and “[c]ommon questions of fact could not predominate,” id., at 4. In Alvarez, defendant demurred “on the grounds that an order denying class certification of the same class was issued in Duran and thus [plaintiffs] were barred from relitigating the issue under the doctrine of collateral estoppel.” Id.

Preliminarily, the Court of Appeal quickly disposed of the claim that class certification issues may not be resolved by demurrer, holding that “[t]rial courts properly and routinely decide the issue of class certification on demurrer.” Alvarez, at 5-6 (italics added).

Certification of Class Actions Class Action Court Decisions Uncategorized

Dunbar v. Albertson’s-Class Action Defense Cases: Certification Of Employment Class Action Seeking Overtime Pay On Theory That Employer Misclassified Employees As Exempt Properly Denied California Court Holds

California Trial Court Properly Engaged in “Weighing Process” to Determine Commonality of Class Action Claims and Correctly Refused to Certify Class Action Because Individual Issues would Predominate

Plaintiff, a grocery manager at Albertson’s, filed a putative class action seeking overtime compensation on the theory that Albertson’s erroneously classified him as an exempt executive employee. Defense attorneys objected to certification of the class action on the grounds that individualized issues of liability and damages would predominate. Dunbar v. Albertson’s, Inc., 141 Cal.App.4th 1422, 1424-25 (Cal.App. 2006). The trial court agreed with the defense, and refused to certify the lawsuit as a class action. The appellate court affirmed.

Plaintiff’s motion for class certification consisted of more than 60 virtually identical declarations of grocery managers stating that the great majority of their work time was spent in the allegedly non-managerial tasks of walking the floor to verify that inventory was properly stocked, stocking shelves, organizing the stock room, unloading new merchandise, responding to customer questions, cashiering, putting price tags on items, checking inventory, and doing routine paperwork. Dunbar, at 1424-25. In opposition, defense attorneys submitted excerpts of deposition testimony from plaintiff’s declarants, and filed 79 declarations of grocery managers – many of whom had executed declarations for the plaintiff – that described “in varied terms their allegedly executive work at different stores.” Id., at 1425. “This evidence was accompanied by a chart outlining how the deposition testimony and counter-declarations differed from the declarations plaintiff submitted. Defendant also presented statistics on the varying amounts of time plaintiff’s declarants spent working cash registers each week during the period from July 2004 through April 2005.” Id.

Certification of Class Actions Class Action Court Decisions Uncategorized

IBM Class Action Defense Case-Syverson v. IBM: General Release And Covenant Not To Sue Created Confusion In Employee Layoff Agreement Rendering Waiver Of ADEA Claims Unenforceable Ninth Circuit Holds

Ninth Circuit Reverses District Court Judgment Enforcing Employee Waiver of ADEA Claims Because Language was not “Written in a Manner Calculated to be Understood by an Average Individual Selected by IBM for Employment Termination” and so was not “Knowing and Voluntary”

A putative class action was filed against IBM based on the allegation that an employee layoff program violated the federal Older Workers Benefit Protection Act (OWBPA) and the federal Age Discrimination in Employment Act (ADEA). Syverson v. International Business Machines Corp., 461 F.3d 1147, 1149-50 (9th Cir. 2006). Defense attorneys moved to dismiss the class action complaint based on the executed wavier of ADEA claims and covenant not to sue signed by the plaintiffs as part of the layoff program. Id., at 1150. The district court granted the defense motion to dismiss the class action, but the Ninth Circuit reversed.

In 2001, as part of a workforce reduction plan, IBM offered employees that had been selected for termination severance pay and benefits if they executed a “Microelectronics Resource Action (MERA) General Release and Covenant Not To Sue.” Syverson, at 1149. Plaintiffs filed age discrimination charges with the Equal Employment Opportunity Commission; the EEOC dismissed the charges because it found that “the MERA Agreement satisfies the OWBPA’s minimum requirements for ‘knowing and voluntary’ waiver of ADEA rights and claims and is enforceable, thus depriving the employees of their right to pursue their age discrimination claims.” Id., at 1150. The EEOC issued plaintiffs notices of right to sue, and they commenced a putative class action challenging, in part, “the MERA Agreement’s use of both a release covering ADEA claims and a covenant not to sue excepting them, the pairing of which allegedly caused confusion over whether ADEA claims were excepted from the release.” Id.

Class Action Court Decisions Employment Law Class Actions Uncategorized